Traders International, Kolkata V. ITO, WD-39(3), KOLKATA, Kolkata

ITA 703/KOL/2015

• Counselvise Citation: 70323514 RSA 2015
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 21-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH KUMAR DUGGAR

Judgement Text

I.T.A. NO. 703/KOL./2015 ASSESSMENT YEAR: 2004-2005 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 703/KOL/ 2015 ASSESSMENT YEAR : 2004-2005 TRADERS INTERNATIONAL,............................. ................................APPELLANT 44, C.R. AVENUE, KOLKATA-700 012 [PAN : AACFT 4699 Q] -VS.- INCOME TAX OFFICER,................................ ...........................RESPONDENT WARD-39(3), KOLKATA, 3, GOVERNMENT PLACE, KOLKATA-700 001 APPEARANCES BY: SHRI RAJESH KUMAR DUGGAR, FCA, FOR THE ASSESSEE SHRI DEBASISH LAHIRI, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 17, 201 5 DATE OF PRONOUNCING THE ORDER : OCTOBER 09, 2015 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, KOLKATA DA TED 23.03.2015 FOR THE ASSESSMENT YEAR 2004-05 AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE OF RS.91,505/- MAD E BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) ON AC COUNT OF COMMISSION AND DISCOUNT. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHI P FIRM, WHICH IS ENGAGED IN THE BUSINESS OF TRADING OF SANITARY ITEM S. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 18.08.2004 DECLARING TOTAL INCOME OF RS.1,74,260/-. IN THE PROFIT & LOSS A/C. FILED ALONG WITH THE SAID RETURN, A SUM OF RS.2,09,720/- WAS DEBITED BY THE ASSESSEE ON ACCOUNT OF COMMISSION AND DISCOUNT. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE FOR DEDUCTIO N ON ACCOUNT OF I.T.A. NO. 703/KOL./2015 ASSESSMENT YEAR: 2004-2005 PAGE 2 OF 4 COMMISSION AND DISCOUNT WAS EXAMINED BY THE ASSESSI NG OFFICER. ON SUCH EXAMINATION, HE FOUND THAT A SUM OF RS.40,000/- WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF THE AMOUNT PROVIDED FOR NEXT YEAR, WHILE A FURTHER SUM OF RS.51,505/- WAS CLAIMED BY THE ASSESSEE AS T HE AMOUNT ADJUSTED TO OUTSTANDING LIABILITIES FOR COMMISSION. FURTHER GOING BY THIS NARRATION/ NOMENCLATURE GIVEN BY THE ASSESSEE TO TH E RELEVANT TWO AMOUNTS, THE ASSESSING OFFICER WAS OF THE OPINION T HAT THE SAID AMOUNTS DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION BUT THE SAME WERE PERTAINED EITHER TO THE EARLIER YEAR OR TO THE NEXT YEAR. HE, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE FOR COMMISSION TO THE EXTENT OF RS.91,505/-. 3. ON APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE SA ID DISALLOWANCE MADE BY THE ASSESSING OFFICER OBSERVING THAT THE AS SESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT IN ORDER TO SUPPORT AN D SUBSTANTIATE ITS CLAIM THAT THE IMPUGNED AMOUNT OF COMMISSION WAS PE RTAINING TO THE YEAR UNDER CONSIDERATION. HE ALSO HELD THAT THE PHO TO-COPIES OF VOUCHERS PRODUCED BY THE ASSESSEE TO SHOW THAT THE OUTSTANDI NG COMMISSION WAS PAID OFF IN THE NEXT FINANCIAL YEAR WERE NOT SUFFIC IENT TO SUPPORT AND SUBSTANTIATE THE CLAIM OF THE ASSESSEE FOR DEDUCTIO N ON ACCOUNT OF COMMISSION. AGGRIEVED BY THE ORDER OF THE LD. CIT(A PPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF OUTSTANDING CO MMISSION WAS DISALLOWED BY THE ASSESSING OFFICER MERELY ON THE B ASIS OF NOMENCLATURE/NARRATION GIVEN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND THE CONCLUSION DRAWN BY THE ASSESSING OFFICER ON TH E BASIS OF THE SAID NOMENCLATURE/NARRATION THAT THE COMMISSION WAS NOT PERTAINING TO THE YEAR UNDER CONSIDERATION, WAS NOT CORROBORATED BY A NY EVIDENCE OR MATERIAL BROUGHT ON RECORD BY HIM. AS EXPLAINED BY THE ASSESSEE BEFORE I.T.A. NO. 703/KOL./2015 ASSESSMENT YEAR: 2004-2005 PAGE 3 OF 4 THE LD. CIT(APPEALS), THE COMMISSION PROVIDED FOR W AS PERTAINING TO THE YEAR UNDER CONSIDERATION BUT SINCE THE SAME WAS NOT PAID IN THAT YEAR, IT WAS PAYABLE IN THE NEXT YEAR. THE NARRATION/ NOMENC LATURE GIVEN IN THE BOOKS OF ACCOUNT, HOWEVER, WAS NOT HAPPILY WORDED A ND THE SAID COMMISSION HAVING BEEN ACTUALLY PAID BY THE ASSESSE E IN THE SUBSEQUENT YEAR, I AM OF THE VIEW THAT THE LD. CIT(APPEALS) WA S NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER ON THE GROUND THAT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF AC COUNT TO SUPPORT AND SUBSTANTIATE ITS CLAIM. AS SUBMITTED BY THE LD. COU NSEL FOR THE ASSESESE BEFORE ME, THE APPEAL OF THE ASSESSEE WAS HEARD BY THE LD. CIT(APPEALS) IN THE YEAR 2015 AND DUE TO LAPSE OF TIME, THE ASSESSE E COULD NOT PRODUCE THE BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATI ON, I.E. FINANCIAL YEAR 2003-04. MOREOVER, KEEPING IN VIEW THE NATURE OF TH E BUSINESS OF THE ASSESSEE THAT IS OF TRADING OF SANITARY ITEMS, THE PAYMENT OF COMMISSION IS A REGULAR FEATURE AND AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESESE, THE CLAIM OF THE ASSESSEE FOR COMMISSION WAS PARTLY ALLOWED BY THE ASSESSING OFFICER HIMSELF WHILE MAKING DISALLOWANCE ONLY TO THE EXTENT OF RS.91,505/- OUT OF THE TOTAL COMMISSION OF RS.2,09, 720/- CLAIMED BY THE ASSESSEE. HAVING REGARD TO THESE FACTS OF THE CASE, I AM OF THE VIEW THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON A CCOUNT OF COMMISSION AND CONFIRMED BY THE LD. CIT(APPEALS) IS NOT SUSTAI NABLE AND DELETING THE SAME, I ALLOW THIS APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON OCTOBER 9 TH , 2015. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 9 TH DAY OF OCTOBER, 2015 COPIES TO : (1) TRADERS INTERNATIONAL, 44, C.R. AVENUE, KOLKATA-700 012 I.T.A. NO. 703/KOL./2015 ASSESSMENT YEAR: 2004-2005 PAGE 4 OF 4 (2) INCOME TAX OFFICER, WARD-39(3), KOLKATA, 3, GOVERNMENT PLACE, KOLKATA-700 001 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOLK ATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.